ANNUAL BUDGET STATEMENT

Debate resumed. 3.40 pm

Dr Mohamad Maliki Bin Osman (Sembawang): Mr Speaker, Sir, thank you for allowing me to participate in this debate.

Last year seemed to be the "R" year for Singapore - Singaporeans were introduced to many "R" words that they are not usually used to - restructuring, remaking, refreshing, revitalising, renewal. Those are the few that I can think of so far. Actually, these words have one thing in common. They are the base words with the prefix "re". I am not a linguist but these words suggest that what we have been doing previously are no longer relevant. Thus, the need for us to redo them, and we must before Singaporeans get fatigued with the letter "R".

Sir, I am going to focus on several aspects related to the issue of Enhancing Human Capital presented by the Minister for Finance and the ERC Report. Like many of my colleagues in the House, I welcome the Government's decision to set up a statutory board to facilitate this process.

The first point I want to talk about is the issue of training and lifelong learning. Sir, apart for the "re" words, Singaporeans are also rather fatigued with this constant reminder to train and internalise the value of lifelong learning. Yesterday, Ms Indranee Rajah eloquently argued that Singaporeans should just pull themselves up together and do their part and not expect the Government to do everything for them. Certainly, this is easier said than done. How many Singaporeans are actually hearing the calls made in this House and outside this House by Ministers, MPs, union leaders, etc? But, more importantly, how many in this House are hearing the cries and pleas of Singaporeans? Are we speaking in different languages? Do we understand Singaporeans enough? Are we reaching out enough to the different target groups? We need to understand the deeper and more complex issues that will motivate Singaporeans to accept the need for them to train and continue to train.

[Mdm Deputy Speaker (Mrs Lim Hwee Hua) in the Chair]

3.42 pm

Dr Mohamad Maliki Bin Osman (Sembawang): Madam, the Ministry of Manpower conducted a study on adult training in the year 2000. Overall, it was found that only a third of the economically active Singaporeans engaged in training. The timeframe was 12 months prior to the study. Also, it was found that participation in training is inversely related to age and educational qualification. The higher educated workers were more willing to undertake training than the lower educated ones, and so are the younger workers compared to the older workers. Of significant importance I think is the finding on the motivations or lack thereof among those two-thirds who did not actively participate in training. One quarter of them indicated no desire to train at all. Amongst those who indicated interest, factors that will motivate them to train include whether the training can improve their career prospects, having more time to go for training, the affordability of the course fees, and when their family commitments are taken care of.

A more recent study in 2002 amongst retrenched workers also showed similar trends, especially the inverse relationship between educational qualification and age with willingness to undergo training. In this study, it was found that the educated workers were two times more willing to train compared to the less educated workers.

Amongst those who were re-employed, 30% indicated their unwillingness to seek training. More than a quarter of them gave the reason that it is not necessary or that they were not required to go for training - this despite having been retrenched previously.

Madam, obviously, there needs to be a targeted approach at different groups. I wonder if we have studied these trends sufficiently. Are we being fair to Singaporeans in asking them to buck up and do their part, when perhaps they have very little idea what is happening and what they are expected to do? I wonder if the Government has an indication how many Singaporeans have actually picked up the ERC Report, whether in the bookstores or downloaded them from the Internet. How many Singaporeans, especially the lower educated, understand what is in the Report? Do they really know where we want them to go and what they are supposed to do?

I have argued before in this House the need for Singaporeans to identify and own the problem that we face. We have to make them understand these problems and then own it together with the Government before we can expect them to come up and do their part. I think, so far, all they have heard in the last two years is, "economy is bad, so cut CPF; economy is still bad, cannot be choosy; economy may still remain bad, must go for training and upgrade yourself; must remain relevant, otherwise you will be in trouble." Basically, keep striving; do not be complacent, or else you will be left behind.

This leads me to my next point - implications of this requirement to upgrade on the family. The earlier list I highlighted also noted that training was more prevalent amongst workers who are single compared to those who are married. Of course, if we factor the issue of age and educational qualification, we will realise that those who need training most are not getting it. This is not surprising as heavier family commitment could have hindered training participation amongst the married persons. Madam, to many Singaporeans, this is the real issue. The average couple with two school-going children work during the day and spend the evening supervising their children's education, if they are capable of. Some have difficulties even doing so. Some have to work two jobs to survive. Now, we want them to train and upgrade themselves, to develop our human capital.

With this growing emphasis for Singaporeans to develop and upgrade to stay relevant and perhaps sharpen their competitive edge, we must seriously consider the impact on the family. Unless training opportunities are available during working hours, most training is often done after working hours. There needs to be a supportive infrastructure to enable this to be part of the living patterns of Singaporeans. Without such infrastructures, many will find the pressures too harsh to handle. We already have problems of latch-key children with two parents who have to work during the day. Can you imagine the phenomenon that will develop when parents have to go for their classes in the evenings? These are systemic effects that will further challenge the institution of the family. Madam, with all these complex demands on Singaporeans and their families, do we wonder why many Singaporeans choose to remain single or not have children? I would like to support the call by Mdm Halimah Yacob yesterday to set up the National Council on the Family to ensure a more systematic and systemic approach at addressing issues affecting the family.

A related aspect to the family is that of youths at risk, as we enhance the human capital. As we discuss the impact of this new development on the family, one issue that arises is that of youths at risk. Reports have recently shown the sharp increase in juvenile crime and many experts attribute it to the lack of parental supervision in the family. Can you imagine what it would mean when parents are expected to spend more time in training? What will happen to the supervision of their children?

Sir, for those children and youths who are already victims of circumstance and currently undergoing rehabilitation, we must ensure that sufficient resources are allocated to allow them to develop their potential too. Many do find it difficult to fit back into society and may then graduate to be adult offenders. We must prevent this from happening. Madam, we must also do what we say. When we say that every Singaporean matters, we must recognise their potential and facilitate their enhancement, including those who have failed before.

The next point I would like to touch on is that of the responsibility of the private sector in facilitating this whole notion about lifelong learning and continued education. We have been asking much of Singaporeans and I think Singaporeans have been trying their best to do their part. They swallowed painfully the reality when told that their employers' CPF will not be restored fully for another two years. Last year, during the debate on the CPF issue, I highlighted the need for employers to do their part. This is even more crucial in terms of training. The MOM study I cited earlier also indicated that workers in the public sector are twice as likely to have gone for training compared to those in the private sector.

Madam, the public sector, as I was told, has a policy that every civil servant has the right to 100 hours of training per year. This is very encouraging. But I do not think there is any such policy for workers in the private sector. It is up to the respective employers to facilitate the process for their workers. It is a culture that has to be developed, but if the environment is not conducive, then the value will not be internalised by the people. I encourage the private sector employers to also do their part in making this restructuring work. Much is provided for them in the Budget to facilitate their business but they must also do their part in making it easier for their workers. I encourage the Government to consider mechanisms that will recognise employers who are pro-training, as we recognise pro-family firms. A code in relation to training rights of workers akin to the one in the public sector should be drawn up and implemented in the private sector.

Madam, the education profiles of our workers are diverse and I have made the point about the different approaches needed to reach out to them. The educational levels of our workers have also proportionally increased over time. As we encourage the internalisation of the value of lifelong learning, we need to ensure that Singaporeans have the means to upgrade themselves and certainly take personal responsibility for their training and upgrading processes. The Government has allocated much resources in this regard, through the various programmes as well as through the Lifelong Learning Fund. However, in line with encouraging personal responsibility, some of these workers may need to top up the course fees.

Another group of workers who may need substantial resources in upgrading are the professionals and graduates. To them, the only way up is to get post-graduate training. Currently, however, there is very little support in this area. I would recommend that the Government consider setting up a separate account in the CPF called the Lifelong Learning Account which can be used for topping up of course fees as well as fees for post-graduate training. This will certainly facilitate Singaporeans' ability to upgrade themselves, especially the higher educated ones who already have the necessary motivations. I recognise that the Government has already raised the tax relief for course fees to $3,500 as well as allow tax relief for fees for seminars and conferences. This is indeed laudable. But the individual Lifelong Learning Account will further enhance the ability of Singaporeans to internalise this value of lifelong learning. The reality is that very few Singaporeans have cash savings to be used for upgrading and allowing them to use their CPF savings will go a long way in this regard.

Madam, the "re" words that I started out with imply a constant process of change. Any change will create systemic efforts on the different actors in the equation - from the workers to the families, to the employers and subsequently to the Government. Each plays a critical role. The action of one will affect the others and we need to speak to each other in a language that each understands. We know that we need to enhance our human capital - indeed, I grew up being indoctrinated with this point that human resource is our best and only asset. For the people to accept this, they need to be convinced, and sold too. They need to own it. I encourage the Government not to tell them what to do, rather to share with them what we can do to make this work.

My last recommendation is to produce a simplified version of the ERC Report and let every Singaporean have it. Allow Singaporeans to own the Report, the process, and the direction we are heading.

Madam, I support the motion.

Dr Chong Weng Chiew (Tanjong Pagar): (In Mandarin): The Deputy Prime Minister, in summing up his Budget Statement, said that, "In a rapidly unfolding situation, all work must be done onboard ship while we are sailing and battling the elements. There is no safe harbour where our ship can shelter to rebuild and refit, before heading out to sea." This statement has clearly spelt out the core spirit of the Budget Statement this year, that is, the Government has the means to formulate many strategies to deal with and resolve every crisis.

However, the best medicine for us to ride the storm is to enable our people to emerge from every crisis stronger, more resourceful and resilient, so that Singapore could become an entrepreneurship and creativity hub.

We never doubt the Government's wisdom in facing with any economic predicament and the courage it has to fight all the odds against us. On this occasion, all the various cost-cutting measures and the pro-business environment that is created are all very familiar to us. Many MPs have spoken about these and I would not repeat these points.

Today, I would like to raise three points: firstly, to intensify the concern for small and even micro enterprises; secondly, educate the people on the importance of promoting entrepreneurship; and thirdly, to tell how difficult it is for the Government to be a caring parent to us.

The Government places much importance on the large enterprises. There is nothing wrong about it. In each and every Budget, special consideration is always given to them, and quite rightly so. But the small and even micro enterprises among us seem to have attracted relatively less attention from the Government. In the initial stages, many of these small or micro enterprises gave full play to the fighting spirit of the entrepreneurs to become the sources of future large entrepreneurs. But the road to success is inevitably full of hardships and difficulties. In the process, many of them lost steam and phased out. If we want more large entrepreneurs to be born, should we not show more concern for the sources from which these large enterprises were evolved?

I suggest that some dialogue sessions be conducted for these small and even micro enterprises, to find out the needs and achievements of these enterprising fighters who had started off in a low profile, so that they could make bigger contributions to society earlier. At the same time, we should introduce their entrepreneurial spirit and success stories to our people, and inspire the growth of an entrepreneurial spirit among our people.

Of late, we frequently read in the newspaper reports of young people starting off new ventures and the perspective of advocating entrepreneurship, as though starting new business ventures is the best way to overcome the economic predicament. In fact, what we need more urgently is to cultivate the entrepreneurial spirit of Singaporeans.

A professor of Business Administration from the Royal Melbourne Institute of Technology, Australia, spoke at a youth leadership forum recently that to encourage the people to venture into business, we have to start by reforming our educational system to inculcate in our young people the spirit of entrepreneurship.

What is the spirit of entrepreneurship? To possess the spirit one must dare to take risk, be responsible, creative, farsighted, have the will-power and perseverance. Do we provide the kind of training to equip our young school children with such a spirit?

I suggest we compile the subject materials into a drama that can be performed in schools and case studies to be debated upon. All the events happening in our society should also be compiled as case studies for brainstorming by our students in the secondary schools, junior colleges and universities.

At the same time, we could invite entrepreneurs of various age groups to hold dialogue sessions with the young people, and train our students during their schooling days to adapt to any kind of situation and environment. On the surface, these activities may appear to have nothing to do with the economy but, on the contrary, it is precisely the spirit that is most needed in times of economic difficulties. The spirit of entrepreneurship is the key spirit for Singapore to brave the wind and the waves. We should start cultivating this sort of entrepreneurial spirit among our people as early as possible.

Thirdly, it is difficult to be parents. Yesterday, Ms Indranee cited the example of this collision between a motorcar and the MRT train. She felt that people should ask: what on earth was the Mercedes doing on the MRT track, rather than blame the Government for not taking enough preventive measures? I am raising all these examples to remind Singaporeans that they should not be like the fourth type of Singaporeans as described by Mr Seng Han Thong, that is, those ignorant people who know only how to complain, to blame others but never to blame themselves.

Let me quote another example. Two days ago, I was visiting my residents in Radin Mas. The owner of a garment shop complained to me that the Government had allowed some other people to sell dresses near his shop and stole away all his business. He also commented that the HDB should have taken some measures to create a wave of people passing by the area where his shop was located. I was a bit curious. So I went to take a look at the dresses that he was selling in his shop. The answer was obvious. The designs of his dresses were so outmoded that even my mother would think that they were old-fashioned. Who would buy his dresses? So, rather than complaining, why does he not think of ways to resolve his problem?

Likewise, Singaporeans should learn to be more self-reliant. In his Budget Statement, DPM Lee pointed out the way for Singapore to go. At the same time, whatever can be done for our people has already been done. Dr Wang Kai Yuen has rightly pointed out that Government is not a magician. I think it is time for Singaporeans to make contributions. Ask not what the Government can do for you, but what you can do for yourself. We have to be more realistic in our expectation in life. Which other government in the world has this habit of distributing ang pow to its people? Which other government would subsidise its people to attend courses and upgrade themselves? I think ours is the first in the world.

It is very difficult to be parents. I firmly believe that, as parents of our people, the Government will continue to take good care of our people, to help and guide them. I also believe that, as children, the people of Singapore should also appreciate the good intentions of our parents. We should be responsible. We should know what is right and what is wrong, and be responsible citizens of Singapore.

I support the motion.

Mr Ang Mong Seng (Hong Kah): (In Mandarin): Mdm Deputy Speaker, since 1997, we have been living under the shadow of the Asian financial crisis. After the September 11 event and the Bali bombing in 2002, we are further faced with the problem of terrorism. It is difficult for us to predict how the future will be.

In this extraordinary time, the Government of Singapore is proposing a $1.2 billion deficit budget, with lots of utilities and SC&CC rebates, plus another $500 million set aside for training programmes. These are very good measures. The Government has done all that it is expected to do. But the main concern now is to keep the jobs for the employed, and train the unemployed so that they improve on their employability.

Mdm Deputy Speaker, I would like to speak on the problem of unemployment and the entrepreneurship mindset of our young people.

Our unemployment rate has not come down. The forecast is that it would be between 4.5% and 5% this year. It is now difficult for those who are retrenched to find another job, especially those who are not well educated and above the age of 45. Having to compete with younger and better-educated workers is indeed an uphill task for them. I hope that the Government would do something to encourage the employers to take on the older workers, apart from providing training and retraining opportunities for these workers.

In good times, of course, we think of automation, computerisation to improve productivity and reduce labour cost. But in this difficult time, can we not change the employment attitude? Under the premise of not increasing the cost of labour, we can look into how we can create more jobs for the people. Let me give one example. In the past, car washing at petrol stations was almost all done by automatic car-washing machines. Nowadays, I observe that many petrol stations have switched to manual washing. Two years ago, a certain petrol station at Jurong West Street 93 was planning to install a car-washing machine. But, because of the recession, the petrol station proprietor gave up the idea of automated car washing, and decided to invite the residents nearby to provide manual car washing for his customers, working on a two-shift basis. They charge $5 for every wash, the same as in the automatic car washing stations. For every car washed, $1 would be paid to the petrol station, while the remaining $4 will be shared by the workers. With 60 to 80 cars washed daily, each car-washer will get some $1,500 a month. The petrol station proprietor earns $2,000 a month, without having to commit a capital outlay for the automatic car-washing machine. If every petrol station can have about 10 people working as car-washers and with some 200 petrol stations in Singapore, some 2,000 jobs are created. I think this kind of idea can only be generated in the private sector.

Borrowing from this concept, I would like to make some suggestions for the public sector. For convenience and easy administration, the canteens in most schools are let out to contractors on a tender system. The successful tenderer would then sublet the various stalls to the individual hawkers at a higher rate. Many stalls remain vacant as the hawkers could not afford the high rental. In good times, this may be a good way of management. Now, with the high unemployment rate, can the Ministry of Education consider changing the system by renting the stalls directly to the individuals, preferably the residents nearby, so that they will not have to pay higher rents to the canteen operator. In this way, more people will get the chance to earn a living at a lower cost. Of course, administratively, it will be a bit difficult but it can create more jobs for Singaporeans.

Next, I would like to talk about building up team work. Globally, the global political and economic scenes have changed. We can now sell our Singapore brands to the world market, and this is one way for our SMEs to survive. The GLCs and some of the larger private companies have already gone into China, India and Vietnam for their development. But, in respect of encouraging team work and entrepreneurship, we can do better. SIA, PSA, JTC, HDB etc, have already become well known brands in Asia and all over the world. These GLCs can take the lead and leverage on their experience and reputation to take on the role of matchmaker to take our SMEs into the international markets, such as China, where every businessman would aspire to enter. It is a big market, full of attractions for everybody.

But in order to have a competitive edge in China, we must first of all satisfy three preconditions: financial capital, energy and a team. You must have large capital, you must have a team which you can depend upon and you need to have the entrepreneurial spirit.

When we invest in China, we compete not only with the Chinese traders but we compete with the world. So China has become a centre of contention for the whole world. One example is the Taiwanese investors. They have their people in Guangdong, Shanghai, Jiangsu and the Suzhou Industrial Park. They work as a team. They have a good financial funding system for international investments and development. They have this kind of entrepreneurial spirit. Their projects are closely watched and esteemed by the Chinese Government. But the Singapore SMEs do not have this advantage when they go over to China. Our investors tend to play solo when they venture into China without the support of a team. They lack capital, and they cannot do much to develop and establish themselves.

Singapore has built the Suzhou Industrial Park (SIP) which is now well known throughout China. Recently, I visited Qingdao in the Shangdong province. An official there told me that he and many of his colleagues had gone to the Suzhou Industrial Park to learn. I asked what they were learning from the SIP. He replied that they were there to learn the Singapore management system and the Singapore experience. Our endeavours at the SIP have created a good impression on the senior officials throughout China. When asked further, he said that the Chinese entrepreneurs learnt from Singapore about planning, administration and management; from Taiwanese they learnt how to make money; and from the Hongkongers they learnt about entrepreneurship.

Having learnt from them, the Chinese now have all these three pre-conditions to success. They will be able to break through their old framework and make a lot of money. Their economic growth was around 8% every year for the past five years. So, we must seize the first available opportunity to go to China, preferably within the next five years, otherwise we will miss the boat. In Singapore, we have already good management, planning and experience. We should next learn from the Taiwanese how to make money and learn from the Hongkongers about entrepreneurship. After having acquired all these, then can we make a world for ourselves.

With very keen global competition, we want to be able to create products and services to compete with the world. Then we must be able to strengthen our entrepreneurship. To promote entrepreneurship, overall efforts are required for a sustained period of time. It depends on not just the Government, but also on the kind of social culture to promote entrepreneurship and to change the mindset of the individuals.

Government departments must also change their mindset, so as to create a good environment conducive to the cultivation of entrepreneurship. Senior Minister Lee spoke at the Nanyang Technological University that Singaporeans must turn away from the existing mindset of over-dependence on the Government if they want to continue to enjoy prosperity. I think it is a very important message.

The GLCs should not depend too much on the Government. They must take the lead to help our local enterprises to go out of Singapore and into the world, to sell our brand overseas and not just to stay on in Singapore and compete with our own SMEs, sharing the very small pie with them. To become a globalised city and to promote entrepreneurship, we must be able to step into areas that others have not developed before.

Social problems. Young people in Singapore are very lucky. They are born in a very comfortable and affluent society. They enjoy a good living environment, good education and are able to learn from the information technology such as the Internet. They thus get to learn from information from all over the world. It is apparent that the young people nowadays have better opportunities than we did. There should be more consciousness of national patriotism. But they are apathetic to politics. They are not interested in national and current affairs. They are indifferent to the threat of terrorism and to the possible effect of the war in Iraq, or even the souring of the Singapore-Malaysia relations. Yet, they chase after their favourite pop stars, such as the F4 and the 5566 . They are simply crazy over these idols.

On a more serious note, according to a survey, more than 10% of our students in the institutes of higher learning do not know who the Prime Minister of Singapore is. I think this is some mindset that we cannot accept - young people who care only for themselves and the world around them. They think only about where to travel to, but do not care about major national events. They are simply bo chap - they do not care.

These are all very serious problems for the nation. The young must take this matter very seriously. We cannot allow this to deteriorate.

Mdm Deputy Speaker, I support the motion. 4.18 pm

Ms Braema Mathiaparanam (Nominated Member): Thank you, Mdm Deputy Speaker, for allowing me to join in this debate. I will not belabour on some of the points already raised in this House over the Budget, except to say that I fully support the calls made earlier to make sites more affordable for businesses to thrive, to look deep into what brands Singapore and makes us unique in this area in a globalised world, and to identify what are the key performance indicators. To follow up on what the Senior Minister of State, Mr Khaw Boon Wan's point that we believe truly that we do not confuse us being good with what really makes us great, because that affects our performance and how we aspire. Having said that, I would like to raise three main points.

Firstly, on training and retraining programmes. It is commendable that the Government is pumping $500 million into the Lifelong Learning Fund, bringing the total to $1.5 billion. It is equally commendable that the Ministry of Manpower has also pumped more money into the Skills Redevelopment Programme. These are pro-active measures. However, sometimes one has to be a little bit cautious in getting consoled over sheer numbers. The programmes we have are:

(a) Skills Redevelopment Programme;

(b) NTUC Education and Training Fund that provides union members training;

(c) IT Literacy courses to equip workers with IT skills;

(d) BEST/WISE programmes;

(e) Critical Enabling Skills Programme;

(f) Certification courses for those in technical fields; and

(g) Workskills Training Programme, etc.

The list is quite long, the website is quite interesting. However, my concern here is: is this information going down to the retrenched worker or any worker, so that he knows what is this buffet of courses that is available, and what each of these courses gives him in terms of a better job prospect or a better skill-based kind of training that will take him further?

Therein lies my main concern. The changing dynamics facing a worker today puts more onus on the worker than the employer to know what is out there, to pick up the courses that are relevant to him to make him a better worker and, more importantly, relevant, so that he can feed himself and his family. In this case, it is gender-neutral.

I am talking primarily about a change in mindset, in how we administer these training programmes. If ownership is in the hands of the employee, then he or she can attend training courses with the blessings of the company. For this to work, it is important to develop independent industry-focused career development units, rather than company-based human resource development units. This way, the worker can be counselled on his particular industry, beyond the company's needs. To expect employers to work out good strategies for employee development can only go so far, as the employer will, at the end of the day, be more interested in his or her own profits for the company. Though the Ministry of Manpower and the unions have enforced a number of good practices where development/enhancement of workers is concerned, at the end of the day, the sourcing and development of new programmes is not happening fast enough, as it has been dictated by the demands of the employer. An employee-demand on programmes cuts through this problem also of encouraging workers to attend training courses and help them to take total ownership over their whole career.

Let me also qualify that I make this suggestion in the hope that it can be applied with a greater thrust to the younger workers right now who are more nimble and can ascertain for themselves what they want where their work life processes are concerned. In this aspect, I also endorse what has been raised by Mrs Lim Hwee Hua, especially when it concerns the younger workers, that we do not think about it anymore as an end-point of retirement age at 55 or 62. The earlier we put such practices into reality for younger workers, perhaps it will not be so severe for them in a world that is making more demands day by day.

Much has already been said about Mr Sim Wong Hoo's piece entitled "NUTS" and the need to nurture creativity and entrepreneurship. I would just like to add one important point of view here. I feel strongly that more space must be created by middle and top management levels to allow workers to try out new initiatives. What do I mean by "space"? It is important to allow for mistakes to happen. Hopefully, it will not be too costly, but part of that creative process is to make mistakes. In finding new solutions, when it comes to mistakes, that in itself is a creative process. It is easy for institutions and companies to be lulled into a state of complacency when many of their employees are in WITS programmes and other sub-committees. That is fine and well. But what is more important is the daily interaction within the office space, eg, how the middle or top management layer or even the immediate line supervisor reacts to the worker in the field, what are the suggestions that are taken on board, because each suggestion is a creative process.

But we do tend to fall into this trap of a box. When it is time to think WITS, we wear our creative hats. Outside of WITS, we think of how can we follow the rules. Rules are guidelines to direct an outcome in a consistent manner. Perhaps, sometimes it is good to follow what I heard from a certain CEO: "Just go ahead and do it. If it is wrong, then ask for forgiveness later." So, being bound by rules, the fear of making mistakes has crippled quite a lot of us into not being able to think creatively. I think the Minister of State for Entrepreneurship will have to take this on-board in how to make us less fearful of making mistakes. In my view, this has become one big dampener in trying to create an environment that will help people to think differently and try out new areas.

My third point is with regard to job losses and retrenchments. Like Mdm Halimah, I am concerned if enough has already been done internally within an institution first before the decision to shed jobs was arrived at. One example I can think of here is Ikea's philosophy. For a long time, they have always looked at wanting to make their furniture affordable to the income bracket that they are targeting at, ie, the middle income earners. One way that they have gone about doing it is to ensure that even top management staff do travel economy class. Sometimes, in a far-reaching event like this that we are faced with today, when we have to go through the process of retrenchment, it is also good to relook at the processes within a company, to see whether they have been cost-effective enough from top-down. If not, perhaps it is time to have certain guidelines for public and private institutions that will ensure longer term employability for a good workforce that is keen to keep up with skills training, rather than the bottom-end paying the price for the top-end, or for bad cost-effective structures that were put into place in the company.

The other concern I have about job shedding is: how many of our employers have really explored job sharing and flexi-time management schemes before the decision to shed workers was arrived at? Perhaps, such an accountability, that this has not really worked, will help us to understand why quite a number of workers have had to lose their job. This is also perhaps a good time for such companies to be persuaded to pick up such schemes and to put them in place. Many companies have, for a long time, felt they do not want to get into these schemes because they are messy, they complicate administrative processes, especially job sharing and flexi-time.

Next, I applaud the initiatives of South West CDC and North East CDC in their joint ventures with various Ministries to retrain retrenched workers into child minders and into caring for the elderly. These are, right now, gaps in our services. To fill up that gap with people who do need jobs, retrain them is an excellent idea. In my opinion, there are also other opportunities in other services if we can get enough training funds and trainers, eg, assistant teachers in special education schools, more administrative support for schools, more estate management staff in hospitals. The older and more mature retrenched workers can be trained as para-counsellors too, so that they can help families in crisis.

I am concerned that we do not forget the number of workers with inactive CPF accounts. I think Dr Jennifer Lee has also brought this up - the self-employed, the homemakers and some disabled members. For the homemakers and disabled, this will be an even harder time to return to or enter into the workforce for the first time. Some of them may have dependants with them. I think we should not forget that they would be finding it difficult. Also, how do we keep them on the radar screen?

The Minister for Finance has also offered rebates to help residents, based on house types. That is well and good. Perhaps, may I also suggest that we go a little bit further and take into account retrenched residents who may have a tough time finding a job, because they may be living in 5-room flats, etc, so that they can enjoy such rebates at least for a while longer.

Lastly, much has been said yesterday about a budget deficit. I think we can live with one, as it is more humane to help people get along with their lives, and it is also the right thing to do. The right thing to do here also is to be mindful of the charities scene, as hard-hitting times usually mean less money flowing to beneficiaries.

With that, I support the Budget Statement.

Mrs Yu-Foo Yee Shoon (Jurong): Mdm Deputy Speaker, I rise in support of the Deputy Prime Minister and Minister for Finance's Budget for FY 2003.

I am glad that we are realistic and bold enough to have a deficit budget. Whatever the amount, it is still an effort to deal with the current economic situation. I also strongly support the idea of the Ministerial Committee on Services headed by Deputy Prime Minister Lee, and having Minister of State, Mr Raymond Lim, to take charge of the Government's effort to encourage entrepreneurship in Singapore. I congratulate the Ministry of Manpower for setting up a statutory board for Continuing Education and Training to coordinate training and employment assistance efforts for workers. We are indeed facing challenging and difficult times. We see greater global competition, retrenchments, unemployment and restructuring. It must be one of the most difficult times for us since independence. I am confident that we will pull through this period just as successfully. I say this because in the last 35 years, we have diligently built up our competencies. Singapore itself is a reputable brand. Our competencies reside in our GLCs, our advanced technologies, our local businesses, our SMEs, our educated workforce and our management expertise. I think we should not feel sorry for our strong GLCs and also our strong management expertise. This is our comparative advantage. Our growth has been described as a miracle. 35 years ago, without any resources, we succeeded. Today, we have built up so much experience and expertise, we have no reason not to continue to succeed.

To move forward, we must all consolidate our competencies. ERC has not left any stone unturned, and the Government has accepted the ERC's recommendations. So, instead of pointing fingers at each other, we must now find ways to work hard and fast together. Like Senior Minister of State, Mr Khaw Boon Wan has said yesterday, we need to work fast and find strength in unity. Both the private and public sectors must find synergy to deal with the challenges. We must identify our strengths and weaknesses and move ahead.

We must not be afraid to ride on the economic growth of other countries, such as China, India, Japan, Southeast Asia, Europe, USA and Australia. We already have Free Trade Agreements (FTAs) with a number of them.

To succeed, we need special ingredients. I am referring to a fighting spirit to overcome the economic challenges. Now, what we must have is the will to win.

Domestically, we should also strengthen our economy. As our economy matures, our spending and consumption patterns become more diverse, corresponding to different levels of disposable income. I perceive these as falling into three tiers. At the top tier are high-end enterprises selling high-end luxury goods. In the middle tier are mid-priced brands with a mass-market appeal. At the lowest tier are very basic consumption goods served up in modest surroundings, with minimum packaging and no frills. They are usually associated with traditional small local services-based enterprises, like old-style kopitiams, market stalls or small neighbourhood shops. They serve to build and strengthen the character of local communities, and also help to preserve the arts, crafts and also cuisine that form a part of our cultural heritage. More importantly, these local traditional enterprises all share humble beginnings. Their very existence reminds us daily that as long as one is determined and prepared to work hard, any self-reliant Singaporean can make a decent, honest living. Thus, more importantly, the third tier enterprises also create jobs. I think the entrepreneur, Ms Olivia Lum, is one good example.

Mdm Deputy Speaker, I believe there is much merit in taking a closer look at this third tier of small traditional local enterprises, and ensuring that they too benefit from the Government's measures to help businesses. Without them, we would be left with a much duller and bleaker landscape that bores and disappoints residents and visitors.

I urge the Government to preserve the existence of such enterprises and trades in suburban areas, such as Tiong Bahru and Little India. As far as possible, we should avoid resettling or relocating such businesses, even if it means the urban landscape becomes a little less tidy and neatly demarcated. I am heartened to note that discussions on the importance of retaining "old-world charm" has become more prominent in public forums, and that the Government has taken the views of the public into consideration.

However, not everything about the old world is charming. I support regular maintenance and upgrading of the operating premises of such businesses, and improving public safety and access. In doing so, we should take care to retain the original character of the place, and make sure that operating costs for the enterprises do not rise by too much. The refurbishment of the Maxwell Road Food Centre is a successful example of upgrading. The hygiene, ventilation and lighting have improved, while the original open-air character and original layout have been preserved.

Mdm Deputy Speaker, I have discussed some ways of ensuring that this third tier of small local enterprises does not erode away. I believe it is also important to ensure that those Singaporeans who wish to enter this tier to start small businesses and micro enterprises can do so with minimum costs and minimum red tape. The concept of providing one-stop services to help businesses establish themselves in Singapore is not new. EDB has been employing this strategy to attract big businesses and MNCs to locate in Singapore. The Government's on-going efforts to reduce red tape have also benefited private enterprises. For instance, the one-stop Public Entertainment Licensing Centre helps operators of entertainment outlets obtain all the necessary approvals from multiple licensing agencies at one go. I think the Ministry of Home Affairs has done a good job here. However, more can be done. I urge that this regulatory model and supportive mindset be extended to all forms of businesses and trades. To give an example of red tape, the setting up of the NTUC Foodfare kiosk of about 140 square feet at Jurong East MRT took more than one year, and involved working with as many as seven different Government agencies. Large organisations may have the resources and the patience to wait for administrative details to be sorted out with the relevant authorities. But small businesses or individuals may feel frustrated and discouraged as their livelihood and survival is at stake. Every day spent waiting means another day of lost opportunities.

More generally, I also urge the Government to look into promoting all parts of the services sector. The Government has already announced plans to introduce measures to promote the high value-added segments of the services industry, such as financial services and telecommunications. However, not everyone who wants a job in these high-value added segments will be assured of one. I urge the Committee to consider targeted measures to help Singaporeans enter the more conventional segments of the services industry, such as becoming nurses, home helpers, hairdressers, retail sales personnel, waiters, entertainers, security guards or hawkers. This is especially relevant to those workers who have been retrenched from the manufacturing sector and are prepared to consider working in the services sector.

I also wish to urge the Ministerial Committee to consider how best to attract young talent from all over the world to come to Singapore to provide services in joint ventures with our local youth. For example, in the areas of accounting and management, water treatment, environmental management, early childhood education, preparation for examinations, food, property management, logistics, hotel management, entertainment, music, design, etc, many may have good ideas but lack funding and resources. How do we ensure that the same kind of investment support that is available to manufacturing, the IT industry and the biomedical cluster is available to start-ups in the services industry?

Even though the economic outlook is uncertain, I feel confident that Singaporeans will be able to find niche markets in the services sector and do well. For instance, there is a group of Singaporean musician-entrepreneurs who have been making waves in the regional Mandarin pop music industry. I am not only referring to famous pop stars like Kit Chan or Stefanie Sun, but a group of producers and musicians like Li Si Song, Li Wei Song and Xu Huan Liang, who have produced numerous hits and impressed listeners and fans in Taiwan, Hong Kong, Malaysia and China. I am told that a long line of regional pop stars are queuing up for our local singer-songwriter Tanya Chua to write their next hit. Meanwhile, I have also been told by friends returning from visits to major Chinese cities that every other shop seems to be playing the latest hits of A-Do, our latest male pop export. We also possess some of the best equipped and professional music studios in the region, attracting scores of stars to record albums here.

What is the secret of these musicians' success? It is not in copying or imitating pop music industry workers in Taiwan and China. In fact, it is precisely their unique Singaporean characteristics that create demand. Singaporeans are prized in the industry for being thoroughly familiar with Western as well as Eastern pop music and being able to interpret the latest global music trends quickly and creatively for a regional audience. In other words, they serve as an effective bridge between cultures and add value while translating trends. This is a direct result of our exposure to the West as well as to the East, in a multi-racial and multi-cultural society. If our musicians can play this role in the region, surely this inspires other professions in the services sector. I urge the Ministerial Committee to highlight and promote other such examples of new engines of growth within our services industry.

Now, I would like to touch on the area of use of scarce resources. With the economic uncertainty ahead of us, it is prudent for us to re-examine the uses to which we put our scarce resources and ensure that help goes to those who need it most. In this respect, I support the Government's move to further expand the use of means testing to allocate healthcare subsidies. The means testing framework that the Government has introduced for step-down care three years ago has benefited patients and their families. I would like to congratulate the Ministry of Health for this effort.

However, the Ministry of Health is not the only Government agency that administers subsidies to needy individuals. Other agencies, such as MCDS, MOE, MinLaw and CDCs, also administer subsidy schemes, all with different criteria and requirements. I propose the Government consider streamlining these subsidy schemes and apply a common means testing framework. This will reduce the need for those who need financial help to make frequent and multiple income declarations, and also to reduce duplication of work between Government officials in processing their applications and auditing their declarations.

I would also like to applaud the Government for establishing a portable medical benefits scheme to help workers pay for healthcare even when they are in between jobs. This is a welcome addition to our existing social safety nets. I would like to ask for how long is the medical coverage planned to last for each insured person while not employed.

Still on the issue of scarce national resources, I have observed constant improvements made by the Government in allocating resources amongst Ministries. We have moved from Budgeting for Results to Managing for Excellence and now Resource Accounting. However, I think it would be beneficial for the House to learn more about the budgeting principles used by Ministries to allocate resources to various projects and programmes. How does each Ministry prioritise amongst different policy areas of concern and measure the effectiveness of each programme? In the last few years, large inter-ministerial committees involving the contributions of large numbers of Singaporeans have been set up. Are there any plans to monitor the effectiveness of their recommendations?

Mdm Deputy Speaker, I would like to conclude with some thoughts on the next step for Singapore in maintaining our competitiveness in the global economy. Much has been said about measures on economic restructuring to ensure that our fundamentals remain sound. However, competition in the global economy is waged on many fronts. It is as much about being a choice destination for people all over the world, as it is about effective governance, having a flexible labour market, competitive cost structure and a safe and secure environment. What is it about Singapore that makes people want to visit us, to work and to play here, or to sink roots here? What is it about Singapore that makes our own citizens want to stay here and to contribute?

To this end, I urge the Government to consider more creative ways to shape the vision for Singapore as a choice destination and the best home.

Dr Gan See Khem (Nominated Member): Mdm Deputy Speaker, thank you for giving me the opportunity to raise some of the issues regarding Deputy Prime Minister Lee Hsien Loong's speech on the Budget.

There are many speakers ahead of me who have brought up various issues regarding the Budget on manpower training and promoting private enterprise. I come to you at this late afternoon to put a little more personal perspective into the issue of private enterprises and its development in Singapore.

I represent the business community and both the Singapore Business Federation and the Singapore Chinese Chamber of Commerce and Industry had made responses to the Budget Statement, and both these associations have welcomed the Deputy Prime Minister's pro-business budget. This is a budget that has signified that the Government is responding to the appeal of the private sector for lowering cost of doing business and giving opportunities for SMEs to develop in Singapore.

Many of the Singapore SMEs have struggled since 1997 when the economic crisis hit Singapore and the rest of Asia. Many of us in the private sector have felt that the support from the Government is very much welcomed, but for many of the business sectors in Singapore, we have gone from a stage of relative strength in 1996 to today where many in the private sector are in a very weak stage. The effort to reduce the cost of doing business is welcomed, but we are also talking about Singapore now in the stage where there is reduced demand, where the market is not growing, demand is not increasing and where many people are much more cautious about consumption because of their fear of employability and financial security. So, the private sector welcomes the lowering of cost, keeping the CPF lower for the next two years, but we are now struggling with issues of how to transform our businesses and make it more viable.

We listen to the Government's earlier encouragement to go regional. But we also realise that businesses have to be strong in their home economy before they are able to have the resources and the capacity to go regional. In Singapore, many of the companies, the ones that I represent, also do not find it easy to grow. May I use this opportunity to also illustrate a very personal experience.

When the recession hit Asia in 1997/98 we see, at Health Management International (HMI), much fewer patients from the region coming to Singapore. We are a medical group and we see fewer foreign patients. We also see many of the patients, who used to come to use our facilities, now going to restructured hospitals. They are going to restructured hospitals because their income is going down or they fear for their own job security. So they are moving to restructured hospitals where the services are good and where they are able to receive subvention. There is no way for a private sector hospital group to be able to compete with the subvention of restructured hospitals. For this reason, our performance, as a commercial enterprise, dipped significantly, especially last year, as we got weaker. Last year, we hit a very difficult patch and HMI lost money. It is not news. Many of the members in the business sector were in the losing position the last two years.

What do we do in helping local enterprises restructure and respond, and how can we ensure that our local enterprises are able to build their strength in the local economy and move out to compete regionally?

As we restructured, many of us in the private sector felt that our local banking system has not been most encouraging. As SMEs restructured and struggled with the need to transform and re-engineer, we find that the banking sector has not been supportive. And they have not been supportive also because there are fewer banks to work with. So, as local businesses restructured, we find a less than supportive banking sector, where the banks are more concerned with how they get their money back than how they are able to fund promising local SMEs and how they are able to help these local SMEs transform and grow again.

Second, manpower issue. Private sector companies are competing with GLCs, statutory boards, Government sector and MNCs for the same small talent pool. But, private sector enterprises are not able to compete and offer such high salaries, good benefits, as well as opportunities for growth as the larger organisations in the public sector, the MNCs and GLCs. Hence we see that the main problem of running local SMEs is that we are working with very, very small manpower resources. Is the Government able to help us? Yes, I think the recent budget allocation for manpower upgrading and all that will be able to help us recruit more talents into our workforce. But, for many of us in the local SMEs, this has been, and will continue to be, most challenging.

Third, many of the SMEs are struggling to create new businesses out of a very difficult local operating environment. Many of us in the private sector have to contend with regulatory measures and Government agencies to seek the required support, permits, licensing, to get our businesses done. Many of the speakers before me have mentioned that the Government agencies have been very bound by rules. Whilst I applaud many in the civil service have been trying very hard not to bend the rules but to help SMEs get along with the approval processes, this has been time-consuming. If we are running a big enterprise, if we are running a big organisation, with lots of resources, whether it is manpower or financial, I think the process of waiting for approval to happen would be okay. But if you are running a SME with very little human resource, very small human resource capability, and with very thin financial capability, you find that the process of approval takes so long and it is a very expensive process, and SMEs would find it most difficult to be able to finance the waiting process of all these regulatory approvals.

Let me cite some recent experiences. When the hard times hit HMI, we decided to transform our business from a health services provider to a trainer of healthcare workers. The logic is very simple. When you cannot do the business in one sector you quickly transform into a sector where there is more demand. We have transformed out of the services sector because of the competition that we have from the restructured hospitals and the shrinking foreign and local patients to the private sector. I think that is fine. In businesses we have to switch our course fast. But when we hit on the idea for training, and we still believe that it is a good concept because the healthcare sector has a huge demand for healthcare workers, so we thought that would be something that is worthwhile doing. And because of the recession, many of the people who would normally not enter the health service workforce have come forward and apply for opportunities to be trained as healthcare workers. So we have a situation facing an SME where you have identified a new business sector where the demand is clear, meaning people who are trained for the healthcare sector actually do get employed. The employability rate is very high. We are talking about 75-95% employability after training for a healthcare career. So what problems did we face as a private sector?

The problem we face was that though the Government has been very encouraging in its efforts to provide training and upgrading opportunities for the unemployed and retrenched into service areas where they can find jobs - I think the general support has always been there from day one - what was difficult was the different agencies that were involved with this approval process, for example, my experience with the approval process for one course, the "Enrolled Nurse Training". Singapore has used a lot of foreign workers to staff the lower levels of the workforce in terms of patient care. So many of us, when we go into restructured hospitals or private hospitals, feel that we could be anywhere, in the Philippines or China, due to the sheer number of these foreign workers in our hospitals in Singapore.

So if we were to train our locals, what do we do? We went to the Ministry of Health. We went to the Singapore Nursing Board and said that we have this idea and this is the curriculum. We want to train enrolled nurses because there is a huge demand for them amongst our local hospitals and, as we see it, many Singaporeans who are retrenched and unemployed would like to come and train for a career that has potential for further development as well as stability and fairly good income. The approval process from the Singapore Nursing Board took more than six months. And, as we waited, there were many changes to the structure. We need the Nursing Board's approval before we can get the NTUC and the Skills Development Fund to approve the courses for training and subsidy. So all these approval processes took six months, nine months, and we are still working on it today - many, many months after we had started.

I spoke to our colleague, Dr Ng Eng Hen, earlier and he said to bring it up in the House. I said yes, I will. I threw away my prepared script and speak from my heart and from my experience because I am not the only example in Singapore. I speak from my experience with my colleagues in the Chinese Chamber and the other business sectors. Whilst we want to encourage local enterprise, we want to encourage creation of new jobs, new businesses, new opportunities, I think the Government needs to look not only at reducing business cost. I hate to be ungrateful when I said that, because the business community has been urging the Government to reduce business cost, and now that they have done it, we say that is not enough. It is a very important gesture to reduce business cost but also to look into all the other circumstances that create a very difficult operating environment for our SMEs and for the SMEs to transform, to grow into strong enterprises so that we can move regionally.

Again, using my own examples, I take the Government's directions with very serious belief, conviction and consideration. The Government said the market here is small, go regional. So as an enterprise we went regional, not very far, just 300-400 km north of Singapore, we went into another country to operate a hospital. All is well, except that local SMEs find it immensely difficult to raise funds in Singapore to invest outside of Singapore. And this is why earlier I said we have got to groom our local SMEs to be financially strong, to have a significant market share, to develop human resource and accumulate financial resources in order for them to compete well in the region.

So my experience has indicated that there are terrific market opportunities for healthcare service out of Singapore, but as a local SME how do I go there? Local banks do not lend to SMEs who go regional. They lend to SMEs not on your projects outside of Singapore, but on your capability to borrow in Singapore, which again boils down to your financial resources within Singapore. What is there that you can collaterise? What is there that the banks will find it worthwhile to lend you in your Singapore operations? Not what opportunities you have and the future stream of income you can bring back to your headquarters in Singapore because of your wise and good investments into opportunities out of Singapore. Therein lie the problems that SMEs face and SMEs are still confronted with. Many SMEs, whilst waiting for pro-business measures to come from the Government, have been weakened and will continue to weaken if some of these measures do not come fast enough. When these measures and policies come, if the civil service, the administration arm, does not implement these measures fast enough, we will see many, many more SMEs failing, falling on the wayside, before things get better.

Mdm Deputy Speaker: We will stop here today. Mr Wong.